Incentive Payments

The Medicare and Medicaid incentive payments began in May 2011. Eligible dentists may only receive an EHR incentive payment under either Medicare or Medicaid in a given year. They may switch programs one time only between the time the program began and 2014.

Medicaid eligible dentists may receive up to $63,750 over six years in a span that begins in 2011 and ends in 2021. For the first payment year, Medicaid eligible dentists can receive up to $21,250 for the initial adoption, implementation or upgrade of certified EHR technology. In subsequent years, Medicaid eligible dentists can receive up to $8,500 annually for costs related to operation, maintenance, and demonstration of meaningful use of EHR technology.

Medicaid eligible professionals who also treat Medicare patients will have a payment adjustment to Medicare reimbursements starting in 2015 if they do not successfully demonstrate meaningful use.

Dentists, like the other eligible professionals, may receive up to $44,000 over four years (2011 through 2015). The payment is equal to 75% of Medicare allowable charges for covered services furnished by the Dentist in a year (maximum payment in the first, second, third, fourth, and fifth years of $15,000; $12,000; $8,000; $4000; and $2,000, respectively). Early adopters, whose first payment year was 2011 or 2012, received a maximum payment of $18,000 in the first year. For eligible dentists who predominantly provide care in a health professional shortage area (HPSA), Medicare incentive payments would be increased by 10%.

Beginning in 2015, Medicare eligible dentist who do not successfully demonstrate meaningful use will be subject to a payment adjustment. The payment reduction starts at 1% and increases each year that a Medicare eligible professional does not demonstrate meaningful use, to a maximum of 5%.

Each eligible dentist must make this decision based on a number of factors, especially patient mix. Medicaid incentives are generally more generous but also come with different requirements.

The EHR Incentive Program does not provide for incentive payments beyond the already-established limits, regardless of EHR system costs. The purpose of the Incentive Program is to encourage the adoption and meaningful use of certified EHR technology rather than reimbursement.

No up-front funding is provided. In Medicare, incentives are only available after a qualified dentist demonstrates meaningful use. This demonstration requires reporting on activities over a contiguous 90-day period. In the Medicaid program, qualified dentists can receive some funding before demonstrating meaningful use, provided they can demonstrate appropriate steps to adopt, implement or upgrade their certified EHR technology.

Through 2016, eligible dentists can receive a one-time incentive payment of 85% of net average allowable costs (not to exceed $25,000) for the purchase and initial implementation or upgrade of a certified EHR. After acquiring an EHR and receiving the first payment, dentists can then receive incentive payments for up to 5 years (but not beyond 2021) for the net average allowable costs to operate, maintain, and use their EHRs (allowable cap per year is $10,000) if they meet the definition of a meaningful EHR user.

The first difference is that only dentists with at least a 30% Medicaid patient volume qualify for the Medicaid incentives; in contrast,eligible Medicare providers do not have any minimum patient volume requirement. Second, payments for the Medicaid program are up to a maximum of $63,750 over 6 years while in Medicare, the maximum is $44,000 over 5 years. Finally, in Medicaid, payments are based on actual upfront purchase and ongoing maintenance costs. Medicare payments are made as a percentage of Medicare charges rather than based on the actual purchase and maintenance costs.

Yes. Incentives are subject to income taxation, like other gross receipts.

Contact EHR

American Dental Association
Department of Dental Informatics
Phone: 312.440.2500
Email: EHR@ada.org
ADA business hours are 8 a.m. to 5 p.m. U.S. Central Time.